Redoing Debt

Whelp, The Husband came to me the other day with a plan to help us get out of debt. He had a whole spread sheet ready to go and approached me with, “don’t say no before I tell you my ideas”.

He said since we have such a ginormous credit card balance, why don’t we drop our retirement deductions, just until we are credit card debt free, to get us out of debt faster. In many ways, this bums me out, but seeing the numbers laid out in his spread sheet was pretty cool.

At the rate we are going right, we are paying roughly $625 a month towards our credit card debt. At that pace, we wouldn’t get out of debt for 4 years, when our son would be starting his senior year… YIKES! With the numbers he laid out, we could decrease our retirement contributions by half and be out of debt in a year. WHOA! WHAT?

Although, there will be a hit to our retirement, it’s nice to have a light at the end of a very long tunnel!

The Husband was maxed out in his retirement deductions and we cut that in half. I was planning on upping my deductions to $1200 a month, but instead am dropping it to $600. It hurts, to be sure; but I do think it will be the best thing for our family.

Our minimum payments will go from $625 a month to over $1600 per month. Based on the spreadsheet he made (he’s totally a smart computer/excel nerd), we would be out of debt in 13 months from now. I’m hoping we can throw the odd extra cash towards our credit card throughout the year too and hoping we can get it down to 12 months to payoff.

I’m just so sick of not making progress and so thankful that he’s been crunching numbers and came up with a workable solution.

The plan is to halve our retirement contributions, pay off our credit card debt in a year, and then re-up our retirement contributions. The Husband will max out again and I will up my deduction to $1200 per month. Our retirements will take a hit. In that regard, we are definitely slowing progress but we are literally paying hundreds of dollars a month in credit card interest and we will be able to knock out our debt so much faster this way. And we will still be the ones paying it off. No easy way out. No hand-outs from anyone. No settling of debts. We will pay back every penny we borrowed and get ourselves out of debt!

This wasn’t the original plan, but plans change and we are going to get out of debt!